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INSIDE TRACK

Written by Beth Walter, Sr. Product Manager – Digital Marketing

June 23, 2021

One of the most far-reaching consequences of the slow and painful death of the third-party cookie will be the development of a new advertising ecosystem that will predominantly feature a first-party data solution known as “Walled Gardens.”

Walled Gardens represent a closed environment that is the exact opposite of today’s online advertising world, where the majority of websites sell their ad inventory via various ad networks that are easily accessed by DSPs (Demand-Side Platforms).

In the world of the Walled Garden, advertising inventory is exclusively available through websites the content publisher owns.

Amazon is the most prominent Walled Garden. If you want to run ads on Amazon or any of its sites, you have to buy inventory from Amazon directly: they have their own DSP they use to reach all of their associated websites. Like most platforms, they offer either a self-service or a fully managed option. The fully managed option is available to advertisers spending $35,000 or more per month.

Despite being the most prominent, Amazon is actually the third-largest ad network in the US behind Google and Facebook. However, they are growing – and quickly. The reason for this hyperbolic growth goes back to this blog’s first sentence: as third-party data sunsets, first-party data collected on the actual publisher’s website will be what many advertisers use to target their ads.

After all, who has better data on practically everything you buy online than Amazon? They can now use that data to build a profile their advertisers can leverage to reach potential customers for everything from insurance to parts and service.

Imagine Amazon as the new model for ad sales. Publishers with websites or networks of websites such as Google can use the data they collect about you while you browse their digital properties to target ads for their advertisers. For example, Facebook can use the data they collect about you across owned platforms like Facebook and Instagram to target ads across any of their owned media. Apple can use the data it collects about users across its various properties to target ads in places such as the Apple App Store.

All of a sudden, things do not look so bad for these huge advertising behemoths as third-party cookie data goes by the wayside. In fact, it looks pretty good for them.

Except now, infighting is now starting to develop among the big three. In mid-June, Amazon announced that they will not support the testing of Google’s Federated Learning of Cohorts (FLoC). FLoC is Google’s solution to the problem of collecting web browsing data and delivering targeted ads in a cookie-less world. There will be more of this kind of conflict to come in the near future – you can be sure of that.

Where might we see other Walled Gardens pop up? Remember a few years ago when there was chatter about restricting the type of data ISPs could capture, aggregate, and use to target their customers? Well, the ISPs won that battle. Because of that, AT&T, Verizon, Comcast, and other large ISPs who have literally millions of data segments from households they service will likely be the next major players in the world of Walled Gardens.

Let’s drill down to our industry: automotive. What does a future of Walled Gardens mean for us? In fact, it has already begun. Companies such as Cars.com who also own popular sites like DealerRater have created an entire new division of their company dedicated to this concept.Cars.com calls it Fuel, and it was specifically created to facilitate utilization of their walled garden data by advertisers to target potential customers who are in the market for a vehicle. Now imagine that concept spread out across the industry to include Cox and other major players.

In effect, today’s open advertising ecosystem is being transformed into a highly segmented, publisher-controlled maze of Walled Gardens through which an advertiser must navigate simply to buy ads and reach audiences. You have to love this industry; it keeps everyone on their toes.


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